Question 2 The following balances were extracted from the books of Pyramid Bookstore, a sole trader on 30 June 2021. Pyramid Bookstore Trial balances as at 30 June 2021 Descriptions RM RM Sales and purchases 286,500 381,900 Inventories 29,400 Sales and purchase return 10,500 7,600 Carriage inwards 14,700 Discount allowed and discount received 2,400 1,800 Wages and salaries 36,600 Insurance expenses 3,300 Printing and stationery expenses 14,400 Postage and telephone expenses 9,600 Electricity expenses Bad debts 8,400 8,100 Provision for doubtful debts 3,600 Advertising expenses 9,300 Sales commission expenses 15,300 Building at cost 104,400 Motor vehicles at cost 36,300 Accumulated depreciation Building Motor vehicles Bank overdraft Trade receivables Trade payables 16,500 18,000 10,200 78,600 61,500 Capital Drawings 197,500 30,800 698,600 698,600 As at 30 June 2021 the following additional information are available: 1) Value of inventories as at 30 June 2021 was RM128,500. 2) Depreciation is to be provided at the following rates: Buildings: 10% per annum on cost Motor vehicles: no scrap value, with an estimated useful life of 10 years. 3) Business paid by cheque for the purchase of colour laser printer on 20 May 2021 for residual value of RM5,600. The equipment is expected to have an estimated useful life of 4 years and residual value of RM1,800. Depreciation is to be provided using the reducing balance method 4 Business Accounting (BAAB1014) January 2022 Special Examination CONFIDENTIAL giving a full year's depreciation regardless of date purchase. Accounting entries have not been made for the purchase and depreciation. 4) Electricity incurred and amounted to RM900 was not recorded. 5) Additional bad debts of RM1,600 are to be written off and the provision for doubtful debts is to be set at the rate of 5% on balance on trade receivables at year end. Required: a) Prepare Pyramid Bookstore's Statement of Profit or Loss (post adjustments) for the year ended 30 June 2021. (20 marks) b) Prepare Pyramid Bookstore's Statement of Financial Position (post adjustments) as at 30 June 2021. (20 marks) (Total: 40 Marks)